Thursday, April 10, 2014

Now the Trap Door Opens....4.10.14

WOW!!  That was a nasty day with a complete reversal of Wednesday's strength and to drop to lows below Monday. Blog traffic suggests new fears above earnings but nobody seemed to care yesterday afternoon so the underlying factors for the collapse (and that's what it was) are still elusive. 
NYAD fell to the low .30s level and the VIX climbed 15% intraday...emphasizing the extent of the selling.
Today's reversal will no doubt dampen enthusiasm for another near term rally...nobody likes to be burned twice and buyers at yesterdays highs will likely be looking to recoup their losses at the earliest opportunity.
QQQ and XLF were 2 of the biggest losers today but even the utilities (XLU) got hit.
Treasury bonds were the big winner on the GAMMA model. (not shown)